The Bhutanese Leading the way.
The Royal Securities Exchange of Bhutan Limited (RSEB) which is Bhutan’s only stock exchange or market has mainly been showing red or decreased value of shares in recent times.
The Stock Exchange has 18 listed companies of which, as of Friday, 14 are down, one is unchanged and only three were marginally in the green, which are Bhutan Tourism Corporation Limited (BTCL), Royal Insurance Corporation Limited (RICBL) and Sherza Ventures Limited (SVL).
The matter of concern is that both types of stocks that reflect the internal economic situation, like Financial Institutions (FIs) and the export oriented businesses, like Ferro Alloy companies stocks are down.
As pointed out last time, out of the 8 FIs, 6 have made lesser profits than last year except for BoB and NPPF both of which are not listed.
The high flying Ferro Alloy company stocks are also down due to poor performance in 2024.
The stock market, while not fully representative of the Bhutanese economy, does indicate that the economy is not doing well at the moment.
On 19th April 2024 the stock exchange was at 1,517 points compared to 1,445 points in 18th April 2025.
The CEO of RSEB, Dorji Phuntsho, said the stock exchange will basically reflect the economic barometers.
He said if the economy is booming and there is credit creation, there will be liquidity in the market and the demand for stocks will increase leading to a higher price for stocks, but he said if the economic performance is low then there will be low liquidity and lesser demand for stocks.
The CEO said that it is possible to deduce from the performance of certain stocks that other non-listed companies are also not doing well. He gave the example of how Dungsam Polymers performance reflects the performance of Dungsam Cement or how the condition of Ferro Alloys show how steel is doing.
He said cement and steel would do better if there was a construction boom and more demand.
At the same time, the CEO said that stock investors have benefited in dividends given in the past two years. He said the Bhutanese stocks are usually held by long-term investors and there is not much of a sell off happening unless somebody needs liquidity.
Given the poor performance of stocks, one may think it is not the best investment, but if one takes a longer term look then it is one of the best investments.
On 31st December 2019 the stock exchange had 1,000 points which over five years increased to 1,445 points in 18th April 2025. If one had bought an average of all shares then that means a 45% gain in value since then.
